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EXHIBIT 10.15(b) The Ryder System, Inc. 1994 Incentive Compensation
Plan for President-Consumer Rental, Vehicle Leasing &
Services Division.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 1
Supersedes 1993 President
Consumer Rental Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1994
Incentive Plan for the President, Consumer Rental (Consumer), Vehicle Leasing &
Services Division (VLSD). The plan is intended to serve as a single,
comprehensive source of information that will explain your bonus for achieving
various levels of performance. Questions should be addressed to your
supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
RSI COMMERCIAL CONSUMER INDIVIDUAL TOTAL BONUS
PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE OPPORTUNITY *
20% 20% 40% 20% 100%
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1994, your bonus payout will be based on Ryder System, Inc. (RSI or the
Company) performance, Commercial performance, Consumer performance and your
performance as an individual.
RSI performance is measured based on a combination of RSI Net Earnings After
Tax (NAT) Return on Assets (ROA) performance and RSI Net Earnings Before Tax
(NBT) performance for 1994.
Commercial performance is measured based on a combination of Commercial NAT ROA
performance and Commercial NBT performance for 1994.
Consumer performance is based on Consumer NAT ROA performance and Consumer NBT
performance for 1994.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you and your supervisor agreed to at the
start of the year. Given their importance, the objectives should be in writing
and updated during the year to adjust for priorities that may have changed.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 2
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid
which combines RSI ROA performance and RSI NBT performance.
RSI ROA performance for the bonus year is calculated by
dividing RSI NAT by RSI average assets.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax for the bonus year, as certified to the
Board of Directors and shareholders of RSI by the
Company's independent auditors, including appropriate
accruals for all incentive awards estimated to be
payable for that bonus year.
-- RSI average assets is defined as the average of the
four quarters' average assets. A quarter's average
assets is defined as the assets, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total assets as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before
Tax as certified to the Board of Directors and shareholders of
RSI by the Company's independent auditors, net of a provision
for the total of all incentive awards, for the bonus year.
- COMMERCIAL PERFORMANCE -- Commercial performance payout is
based on a grid which combines Commercial - ROA performance
and Commercial NBT performance.
Commercial - ROA performance for the bonus year is calculated
by dividing Commercial NAT by Commercial average assets.
-- Commercial - NAT is defined as Commercial -
consolidated Net Earnings After Tax for the bonus
year, as verified by the Senior Vice President and
Controller, RSI, including appropriate accruals for
all incentive awards estimated to be payable for that
bonus year.
-- Commercial - average assets is defined as the average
of the four quarters' average assets. A quarter's
average assets is defined as the assets, as shown on
Commercial's balance sheet at the beginning of each
quarter plus the total assets as shown on
Commercial's balance sheet at the end of each
quarter, divided by two.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 3
Commercial - NBT is defined as Commercial - consolidated Net
Earnings Before Tax as verified by the Senior Vice President
and Controller, RSI, net of a provision for the total of all
incentive awards, for the bonus year.
- CONSUMER PERFORMANCE -- Consumer performance payout is based
on a grid which combines Consumer ROA performance and Consumer
NBT performance.
Consumer NBT is defined as Consumer's consolidated Net
Earnings Before Tax as verified by the Senior Vice President
and Controller, RSI net of a provision for the total of all
incentive awards, for the bonus year.
Consumer ROA performance for the bonus year is calculated by
dividing Consumer NAT by Consumer average assets.
-- Consumer NAT is defined as Consumer's consolidated
Net Earnings After Tax for the bonus year, as
certified to the Board of Directors and shareholders
of RSI by the Company's independent auditors,
including appropriate accruals for all incentive
awards estimated to be payable for that bonus year.
-- Consumer average assets is defined as the average of
the four quarters' average assets. A quarter's
average assets is defined as the assets, as shown on
Consumer's balance sheet at the beginning of each
quarter plus the total assets as shown on Consumer's
balance sheet at the end of each quarter, divided by
two.
Consumer NBT is defined as Consumer's consolidated Net
Earnings Before Tax as certified to the Board and shareholders
of RSI by the Company's independent auditors, net of a
provision for the total of all incentive awards, for the bonus
year.
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon ROA and NBT performance, and may be paid, in part or in
whole, based on RSI's and VLSD's performance and/or ability to
pay. Such payments are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI.
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the
approval of the Board of Directors of RSI.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 4
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE
RSI performance payout is based on a grid consisting of two
performance variables: 1993 Actual RSI NBT and 1993 RSI NAT ROA. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
1994 ACTUAL NBT ($MM)
THRESHOLD MAXIMUM
209.8 218.3 232.0 245.8 251.0 256.0 265.0
ROA(%) % OF COMPANY OPPORTUNITY
less than 2.5 15 30 40 50 60 70 80
2.5 - 3.0 25 40 50 60 75 85 95
greater than 3+ 35 50 60 70 80 90 100
2) COMMERCIAL PERFORMANCE - ROA/NBT
Commercial performance payout is based on a grid consisting of two
performance variables: 1994 Actual Commercial - NBT and 1994
Commercial - NAT ROA. The potential bonus payout percent is
determined by locating the point on the grid where the variables
intersect. Actual performance may fall between the points
specifically displayed on the grid, and the grid allows for
interpolation between NBT points as shown. No bonus awards will be
paid for performance below threshold. The potential bonus payout is
expressed as a percentage of Maximum Commercial Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL COMMERCIAL PERFORMANCE BONUS PAYOUT AS A
PERCENTAGE OF MAXIMUM COMMERCIAL PERFORMANCE BONUS OPPORTUNITY
1994 ACTUAL NBT ($MM)
THRESHOLD MAXIMUM
157.1 166.0 176.0 182.0 190.0 200.0
ROA (%) % OF COMPANY OPPORTUNITY
less than 3.0 15 35 50 60 70 80
greater than or 25 45 60 75 90 100
equal to 3.0
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 5
3) CONSUMER PERFORMANCE
Consumer performance payout is based on a grid of 1993 Actual Consumer
NBT. The potential bonus payout percent is determined by locating the
point on the grid under the 1994 Actual Consumer NBT. Actual
performance may fall between the points specifically displayed on the
grid, and the grid allows for interpolation between NBT points as
shown. No bonus awards will be paid for performance below threshold.
The potential bonus payout is expressed as a percentage of Maximum
Consumer Performance Bonus Opportunity, as shown on page 1.
POTENTIAL CONSUMER PERFORMANCE BONUS PAYOUT AS A
PERCENTAGE OF MAXIMUM CONSUMER PERFORMANCE BONUS OPPORTUNITY
1994 ACTUAL NBT ($MM)
THRESHOLD MAXIMUM
5.1 10.0 15.7 17.0 18.5 20.0
ROA (%) % OF COMPANY OPPORTUNITY
less than 1.3 15 35 50 60 70 80
1.3-1.8 25 45 60 75 85 95
greater than 1.8 35 55 70 80 90 100
4) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
FAIR - SOME
CRITICAL CONSISTENT WITH SIGNIFICANTLY
SHORTFALLS EXPECTATIONS ABOVE
INDIVIDUAL PERFORMANCE EXPECTATIONS EXCEPTIONAL
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-29% 30-59% 60-89% 90-100%
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY ADJUST
THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED. THE GRIDS
WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS AND
OBJECTIVES.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 6
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
Eligible Base Salary $175,000
1994 RSI NBT $251.0MM
1994 RSI NAT ROA 2.7%
1994 Commercial ROA 3.1%
1994 Commercial NBT $182.0MM
1994 Consumer ROA 1.5%
1994 Consumer NBT $ 17MM
Individual Performance Significantly Above Expectations
1) RSI Performance
20% Maximum RSI Performance Bonus Opportunity
75% Potential RSI Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $175,000 = $ 26,250
2) Commercial Performance
20% Maximum VLSD Performance Bonus Opportunity
75% Potential VLSD Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $175,000 = $ 26,250
3) Consumer Performance
40% Maximum Consumer Performance Bonus Opportunity
75% Potential Consumer Performance Bonus Payout (from grid)
40% x 75% = 30% of Eligible Base Salary
30% x $175,000 = 52,500
4) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $175,000 = $ 26,250
--------
TOTAL BONUS $131,250
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 7
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of $175,000,
then effective June 1 receives an increase to a base salary of
$185,000:
January 1 thru May 31 of Bonus Year:
31 + 28 + 31 + 30 + 31 = 151=.414 x $175,000/yr. = $ 72,450
---------------------- ---
365 days 365
June 1 thru December 31 of Bonus Year:
365 - 151 = 214=.586 x $185,000/yr. = $108,410
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $180,860
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company and the Division Presidents. This amount will
be prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN ADMINISTRATION
1994 INCENTIVE COMPENSATION PLAN PAGE 1
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The President, Consumer Rental, if employed in good standing at the time bonus
payments are made is eligible to participate in this plan. If the President,
Consumer Rental has an agreement which specifically provides for incentive
compensation other than that which is provided in this plan or is a participant
in any other incentive compensation plan of RSI, its subsidiaries or
affiliates, he/she is not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company or VLSD during the bonus year
under any of the following conditions may be eligible for pro rata bonus
awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN ADMINISTRATION
1994 INCENTIVE COMPENSATION PLAN PAGE 2
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1994, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company or VLSD under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
Accruals for the President, Consumer Rental and all discretionary awards are
excluded from funding limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be effected at the
discretion of the Chairman, President and Chief Executive Officer of RSI.
Unused monies may not be carried forward for subsequent bonus years.
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RYDER
PRESIDENT
CONSUMER RENTAL
VEHICLE LEASING & SERVICES DIVISION BONUS PLAN ADMINISTRATION
1994 INCENTIVE COMPENSATION PLAN PAGE 3
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
The total of all discretionary awards for employees under this plan, the VLSD
field bonus plans, the RSI SEVP Incentive Compensation Plan, the Headquarters
Executive Management Incentive Compensation Plan, the Ryder International
Incentive Compensation Plan, the Ryder Services Corporation Incentive
Compensation Plan, and all Division Presidents' Incentive Compensation Plans,
including those granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and
affiliates' incentive compensation plans annually to ensure equitability both
within the Company, and in relation to current economic conditions. THE BOARD
DIRECTORS RESSERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE EXCEPTIONS
TO THIS PLAN AT ANY TIME.